Key Takeaways:
- Coinbase has launched a lawsuit against the SEC and the FDIC for failing to comply with FOIA.
- The lawsuit contends that aggressive regulatory activities hampered the cryptocurrency industry’s banking access.
In a significant move, Coinbase has filed a lawsuit against the United States Securities and Exchange Commission (SEC) and the Federal Deposit Insurance Corporation (FDIC).
This legal action marks a notable escalation in the ongoing tensions between the cryptocurrency industry and U.S. regulators.
Coinbase, in collaboration with consultancy firm History Associates Inc., initiated the lawsuit in the U.S. District Court for the District of Columbia. The lawsuit accuses the SEC and FDIC of obstructing innovation and growth in the digital asset space by withholding crucial information and failing to respond to Freedom of Information Act (FOIA) requests.
Paul Grewal, Chief Legal Officer at Coinbase, has been vocal about the regulatory challenges faced by the crypto industry.
On social media platform X, he stated, “Financial regulators have used multiple tools at their disposal to try to cripple the digital-asset industry. The SEC has claimed sweeping authority, but refuses to provide any rules, let alone consistent or coherent ones.”
Grewal also shed light upon the fact that SEC’s divided, rather litigation based approach to crypto has led to fragmented definitions all over America. This sentiment shadows previous rulings of Binance and Consensys.
This lawsuit follows a series of legal confrontations between the SEC and various stakeholders in the financial and crypto industries. Notably, the SEC had previously filed lawsuits against several major Wall Street corporations and has been criticized for its aggressive regulatory stance.
Coinbase’s lawsuit is not an isolated instance. In mid-May 2024, the American Securities Association (ASA), a financial industry organization based in Tampa, filed a similar complaint against the SEC.
The ASA’s complaint concentrated on the agency’s opaque enforcement operations aimed at how banks and other businesses manage work communication on personal devices. This campaign, which began in late 2021, resulted in more than $1.7 billion in civil fines.
